Crypto currency Regulation of Official Digital Currency Bill
The idea of a cryptocurrency - a digital currency exchange which is not authorised or regulated by the government, does not exist in any physical form and has no means of regulation - does that excite you?
Will you want to invest in cryptocurrency with your money - legal tender authorised and regulated by the government and that you can physically see and know the worth of?
When celebrities like Ranveer Singh and Ayushman Khurana advertise digital currency apps, when Amitabh Bachan and Rajnikant invest in NFT, the people start to believe in the idea of NFTs (Non-Fungible Tokens) and cryptocurrencies and start investing in digital currencies.
And then comes the government with the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 that in essence seeks to regulate the market by prohibiting the use of private cryptocurrency, barring a few with the idea to promote underlying technology and its use.
Cryptocurrency is a parallel currency that exists aside from all the legal tenders. There is no country that recognises cryptocurrency as a legitimate tender other than El Salvador. The risks associated with it are massive. The International Monetary Fund (IMF) has recognized and stated that the crypto-assets are extremely risky and need to be closely monitored since they hold the potential to disrupt various aspects of the global financial system. The RBI and SEBI have also time and again raised concerns on the use of cryptocurrencies.
To provide greater transparency and security to the investor’s money, the Bill has been introduced, whereby, the RBI will be issuing the official digital currency. Since a huge number of people - in crores - have invested in digital currencies, it cannot be stopped but the need to regulate it has never been more intense than before.
The Bill along with the amendments that are being planned for the income tax law to bring the cryptocurrency gains within the ambit of the tax radar, has led to the crash of the Bitcoin by 17%, Ethereum by 15% and Tether by 18%.
November 29th is when the Winter Session begins in the Parliament and when this Bill will see the light of the day. Stay tuned for more updates on the issue.